Crocs, Inc. v. Double Diamond Distribution, Ltd., Appeal No. 2022-2160 (Fed. Cir. Oct. 3, 2024)

In our Case of the Week, the Federal Circuit examined whether a district court erred in dismissing false advertising claims against Crocs Inc. for allegedly misrepresenting the patent status of their popular footwear products.  The Court concluded that a claim under the Lanham Act may arise from the allegations presented, and remanded for further proceedings.

In 2006, Crocs sued its competitors Dawgs Inc., Double Diamond Distribution, and Mojave Holdings (collectively referred to as “Dawgs”) for patent infringement. Defendant-appellants Dawgs responded by filing a counterclaim under Section 43(a) of the Lanham Act, contending they were damaged by Crocs’ alleged false advertisements referring to the primary material of their footwear products, Croslite, as “patented,” “proprietary,” and “exclusive.” Specifically, Dawgs argued that Croc’s false patent claims misled consumers to believe that “Crocs’ molded footwear is made of a material that is different than any other footwear.” Crocs argued that the false advertising claim was barred under the Supreme Court’s decision in Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003) and the Federal Circuit’s decision in Baden Sports, Inc. v. Molten USA, Inc., 556 F.3d 1300 (Fed. Cir. 2009), which established that false designations of authorship are not actionable under Section 43(a). The district court agreed and granted summary judgment to Crocs, reasoning that the advertised terms–“patented,” “proprietary,” and “exclusive”–were claims of inventorship or authorship and were not directed to the “nature, characteristics, or quality of Croc’s products.” Dawgs appealed.

First, the Court distinguished this case from Dastar and Baden, finding that the false patent claim did not stand alone, and that Dawgs presented allegations and evidence to demonstrate that the falsity of Crocs’ advertising statements spoke to the nature, characteristics, or quality of Croc’s footwear products. Further, the Court disagreed with the district court’s reasoning that allowing a claim under Section 43(a)(1)(B) linking a false patent claim to a product characteristic would be contravening Dastar, since a false claim that a product is made of patented material does not solely involve innovation and thus authorship. Accordingly, the Federal Circuit reversed the district court’s ruling, holding that “a cause of action arises from Section 43(a)(1)(B) where a party falsely claims that it possesses a patent on a product feature and advertises that product feature in a manner that causes consumers to be misled about the nature, characteristics, or qualities of its product.”

The full opinion can be found here.

By Brittani S. Gambrell

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Provisur Technologies, Inc. v. Weber, Inc., Appeal No. 2023-1438 (Fed. Cir. Oct. 2, 2024)

In this case, the Federal Circuit vacated a $10.5 million jury verdict against appellant Weber for alleged willful infringement of Provisur’s patents directed to certain industrial food processing equipment.  Among other things, the panel held that the jury’s infringement verdict on one patent was not sufficiently supported by evidence that Weber’s accused products could be configured to infringe.  While Provisur’s expert had testified that certain settings could be adjusted to result in an infringing configuration, where the evidence showed only that Weber was able to make such modifications and not its customers, the products were not “readily configurable to infringe.”  The panel also found that Provisur had submitted insufficient evidence of willful infringement, and that the district court erred by permitting a damages determination based on the “entire market value rule” without evidence that the patented features drove demand for the accused products.  The Court accordingly reversed the district court’s denial of judgment as a matter of law of non-infringement as to one patent; reversed the district court’s denial of judgment as a matter of law of no willfulness; reversed the district court’s denial of a new trial on damages; and remanded for further proceedings.

The full opinion can be found here.

By Jason A. Wrubleski